Correlation Between Exsitec Holding and Avensia Publ
Can any of the company-specific risk be diversified away by investing in both Exsitec Holding and Avensia Publ at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Exsitec Holding and Avensia Publ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exsitec Holding AB and Avensia publ AB, you can compare the effects of market volatilities on Exsitec Holding and Avensia Publ and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Exsitec Holding with a short position of Avensia Publ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exsitec Holding and Avensia Publ.
Diversification Opportunities for Exsitec Holding and Avensia Publ
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exsitec and Avensia is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Exsitec Holding AB and Avensia publ AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avensia publ AB and Exsitec Holding is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Exsitec Holding AB are associated (or correlated) with Avensia Publ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avensia publ AB has no effect on the direction of Exsitec Holding i.e., Exsitec Holding and Avensia Publ go up and down completely randomly.
Pair Corralation between Exsitec Holding and Avensia Publ
Assuming the 90 days trading horizon Exsitec Holding AB is expected to generate 1.07 times more return on investment than Avensia Publ. However, Exsitec Holding is 1.07 times more volatile than Avensia publ AB. It trades about 0.03 of its potential returns per unit of risk. Avensia publ AB is currently generating about -0.13 per unit of risk. If you would invest 14,000 in Exsitec Holding AB on August 28, 2024 and sell it today you would earn a total of 150.00 from holding Exsitec Holding AB or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Exsitec Holding AB vs. Avensia publ AB
Performance |
| Timeline |
| Exsitec Holding AB |
| Avensia publ AB |
Exsitec Holding and Avensia Publ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exsitec Holding and Avensia Publ
The main advantage of trading using opposite Exsitec Holding and Avensia Publ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exsitec Holding position performs unexpectedly, Avensia Publ can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Avensia Publ will offset losses from the drop in Avensia Publ's long position.| Exsitec Holding vs. Svedbergs i Dalstorp | Exsitec Holding vs. Know IT AB | Exsitec Holding vs. FormPipe Software AB |
| Avensia Publ vs. Svedbergs i Dalstorp | Avensia Publ vs. Know IT AB | Avensia Publ vs. FormPipe Software AB |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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